Dear NAFTA Bashers: You Need New Charts

A Policy Options writer blames NAFTA for the decline of US manufacturing. Amusingly, his charts prove otherwise.

An article on Policy Options claims the Facts Support Trump on NAFTA.

Based on the charts presented, it's is one of the silliest articles I have ever seen.

Inflation Adjusted Hourly Earnings

In the US and Canada, real hourly earnings topped 18 years before NAFTA.

Auto Production

US auto production peaked 19 years before NAFTA.

The article concludes: "Free-trade agreements will not be supported if they threaten people’s livelihoods."

I looked up Jordan Brennan, the author of that article.

He's an economist for Unifor, Canada’s largest private sector labour union.

The Real Deal

When your position necessitates having a certain view, that's the view you present even when your own charts show otherwise.

Manufacturing jobs are on the decline everywhere. The trend started long ago. It's called automation.

The New York Times writes about the Mirage of a Return to Manufacturing Greatness.

"On net, global manufacturing employment declined from 1996-2006" says Slate.

The situation will get worse. Clothing is about to be automated and it will take millions of jobs with it.

Brennan and Trump are fighting a battle that cannot be won.

Jobs Not Coming Back

The Brennan bemoans the loss of jobs, but nothing will bring them back. He also bemoans wages but that is barking up the wrong tree as well.

Rising wages incentivize companies to automate. Cheap money from central banks makes financing easy.

Standards of Living

It is foolish to believe there is a benefit to paying more for something. But in general, that's what unions stand for.

If China or Mexico gave us cars for free we should take them. The same with solar panels from China.

When products are cheap, standards of living rise. That's the bottom line behind "fair trade" nonsense.

Trade War

Brennan practically screams for a trade war, but that's a Huge Mistake.

States like Michigan and Ohio pushed Trump over the top in his victory over Hillary, but bad policy is bad policy.

Clueless About Trade

Trump does not understand trade deficits or the folly of Tariffs.

Brennan can't. His position as economist for a large union would not let him come to the proper conclusion, even if he was capable.

For a mathematical explanation of trade deficits, please see Trump's Tariffs Show He's "Clueless About Trade".

Trump's trade policies are set to exacerbate the next global recession, but economic illiterates are egging him on.

Mike "Mish" Shedlock

Comments (31)
No. 1-25
Snow_Dog
Snow_Dog

“If China or Mexico gave us cars for free we should take them. The same with solar panels from China.“

Neither is happening, but nice try Mish.
What IS happening is 15M illegals are in the US being granted sanctuary while the Big Three US automakers take sanctuary from livable wage pressure by offshoring their production to Mexico. That is clear in the post-NAFTA chart and might be the chart that The a White House has been looking at.
economic sanctuary

FelixMish
FelixMish

Peter Drucker accurately predicted the trend in manufacturing jobs a long time ago. He did this by observing that he could use the same curve as had already taken place in farming jobs to extrapolate the future of manufacturing jobs.

This is a technique I have found can be easily used to make predictions that will be laughed at, argued against using common knowledge and understanding. And turn out to be correct and accurate, nonetheless.

Greggg
Greggg

A quick look at the 3 charts... Automation.

Germ
Germ

"When products are cheap, standards of living rise."